PREMIER Lara Giddings said Tasmania was on its way to becoming a renewable energy dynamo but the industry had reached a crossroads.

Speaking yesterday at the opening of the Musselroe Bay wind farm, Ms Giddings said the powerful economic jolt that further wind farm development could provide to regional economies had been threatened by what appeared to be a hostile Federal Government attitude.

Construction of Tasmania's largest wind farm beginning in 2011 brought up to 200 workers to Tasmania's far north east region. And more than $200 million worth of supplies had been procured in Tasmania. The farm's 56 wind turbines generate 168mW of power, and cut out about 450,000 tonnes of carbon dioxide.

Ms Giddings said two things needed to happen before Hydro Tasmania or its Chinese partner Shenhua could build more wind farms.

THE Federal Government needed to end uncertainty that surrounded a pending review of the Renewable Energy Scheme, which had been introduced by the Howard government to provide financial incentives for businesses to build renewable energy infrastructure.

A SECOND Basslink cable was needed because the existing Bass Strait cable did not have sufficient capacity to enable the export of all of Tasmania's wind energy.

Ms Giddings said the logical route for that cable would be via King Island, which would enable construction of a large wind farm on the island.

"A re-elected Labor Government will task the Department of Infrastructure, Energy and Resources with undertaking the full feasibility analysis of a second interconnector for Tasmania by the end of the first year of the new term," she said.

Ms Giddings said she understood that federal Cabinet was split over the future of the Renewable Energy Scheme.

Hydro chairman David Crean said scrapping the scheme would kill off any future wind farm development and would jeopardise the continuing viability of existing wind farms.

"If it did go, they would have to grandfather existing wind farms," Dr Crean said.

Liberal spokesman Matthew Groom yesterday said Ms Gidding's Basslink 2 announcement had been a "cut and paste" of Liberal policy.